Property investment is a huge decision. It is an undebatable fact that real estate has produced many wealthy people of the world. So, you know for sure that property investment is a worthwhile venture. But it is necessary to get a proper property investment advice before jumping with both legs. You must have read books and magazines about real estate investment and eventually have gotten overwhelmed by all the bombardment of information. This is not where you look for property investment advice. There are many other ways to get details. Ask someone who has been in the real estate business for years for property investment advice or seek professional advice. In case you are well versed with the basics of property investment, here are a few points of property investment advice which no magazine or book would give you:
Important Tips For Hiring a Financial Adviser
#1. Property investment is not everyone’s cup of tea
Before you start with the project, make sure that it is your thing. You may get a lot of pieces of property investment advice and that can motivate you to try it out, but it is not as easy as it seems. You are supposed to be the “ready to get your hands dirty” type of a person. Meaning, you need to know your way around a toolbox good enough to be able to solve small issues like repairing a drywall, unclogging a toilet, etc. Of course, a handyman can be called to fix it. But that would cut down on your profits. So, to gain better profits, you need to be get down on your knees and do some repair work yourself or else you may want to consider some other option of investment.
#2. Get into property investment only if you have no pending debts
Property investment may surely be lucrative but it is not a good idea to consider it if you already have debts as an investment property loan would just be an additional debt.
#3. Sometimes it is preferable to hire a property manager
If you are planning to manage several properties, it would be difficult task to be a landlord. In such a case, it is a good idea to hire a property adviser who would handle all the maintenance work and the collection of rent.
#4. Be wary of high interestrates
If you mistakenly sign up for higher rate of interest loan, the whole point of property investment is lost. Imagine if all that you get to earn from rent is consumed in maintenance and loan repayment, the cause of profit is lost.
#5. Calculate the profits first
In case of real estate, it is better to count your eggs before they hatch. It is called calculating the ROI (return of investment). If you invest in bonds, you get 4.5% interest and in case of careful stock investment, you get an ROI of 7.5%. So, after deducting the maintenance costs and the loan instalments, if you are receiving 6% ROI in property investment, only then it is worth it.
#6. It is not ok to compromise on the neighbourhood
In the efforts of looking for low property taxes, do not compromise on the quality of the neighbourhood. Tenants tend to prefer a good neighbourhood that has low crime rate, a growing job market and all the amenities within accessible range from the house, such as parks, malls, restaurants, and movie theatres. People would gladly pay a little more rent for a house in a good neighbourhood. So, the better the neighbourhood of your property, the more is your scope of earning.
Any person, who is well experienced in the field of real estate and is providing you with property investment advice, may surely mention these points as these may not be the guiding points for financial investment but are surely the baselines.